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Emirates NBD PJSC started preliminary talks to buy the Egyptian unit of Lebanese lenderBlom Bank SAL after last week’s explosion forced the Beirut-based company to review its strategy.
Discussions are ongoing and there is no certainty that a deal will be completed, Dubai-based Emirates NBD said in astatement on Thursday.
Earlier thismonth, Blom Bank said it was considering several strategic options, including a sale of its stake inBlom Bank Egypt in response to the depressed outlook for Lebanon’s domestic banking industry. Blom’s Egypt unit has 42 branches and is active in retail and corporate banking, according to its website.
Read more: Lebanon’s Deepening Economic Crisis Laid Bare by Beirut Blast
Lebanese banks are struggling to shore up their finances as the Arab nation grapples with its worst economic crisis in decades. The country was already battling soaring inflation, a rapid devaluation of the Lebanese pound and a shrinking economy before the blast ripped through the capital’s port on Aug. 4.
Beirut-based Bank Audi Sal inMay said it and First Abu Dhabi Bank PJSC mutually agreed to end talks on the sale of the Lebanese lender’s Egyptian subsidiary because of uncertainty created by the coronavirus pandemic.
Emirates NBD, Dubai’s largest bank, already has a sizable presence in Egypt, the Arab world’s most populous country, after buying the local business of France’s BNP Paribas SA in 2012 in a $500 million deal.
Read more: As Oil and Virus Drive Gulf Bank Mergers, Who’s Talking to Whom
In the wider Middle East, consolidation in the banking sector has gathered steam in recent years as lenders are cutting costs and building scale in response to low economic growth.
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